Recent headlines have been dominated by news of the continuing credit crunch, highlighted in the UK by the troubles at Northern Rock, and dramatic swings in the stock market. While the stock market often bounces back within a couple of weeks the dent in people’s confidence can last considerably longer.
The tangible effects of the credit crunch have been felt in recent weeks with many of the banks tightening their lending criteria. Those affected most are buyers with small deposits or no deposit at all. The 100% or more mortgage is being phased out and buyers with deposits of less than 10% are being quoted significantly higher rates than a year ago. First time buyers will be worst affected.
Despite the significant drop-off in new sales being agreed in Berkshire prices have been holding up reasonably well. The interest rate cuts in December and February were a welcome respite to borrowers but what’s really underpinning prices is the continuing shortage of new properties coming on to the market. When confidence is low the default position is still “wait and see”.
It was feared that the buy-to-let market would be the first sector to be hit when prices stalled. With the outlook for capital growth unclear and rents struggling to cover mortgage payments leaving the cash in the bank starts to look more attractive. The news on that front is still contrasting.
While the number of buy-to-let loans being taken out continued to rise through to the end of 2007 recent figures from the RICS showed that the number of properties being made available to rent by Landlords fell towards the end of last year, the first fall in ten years. It remains to be seen whether the move to a flat rate of capital gains tax in April will give investors the extra incentive they have been waiting for to cash in.
While confidence is likely to remain low in the coming months prices should continue to hold up until there are more forced sellers in the market. That is unlikely to happen with interest rates at their current levels and, by and large, people feeling secure in their jobs.
Monday, 17 March 2008
Monday, 11 February 2008
Home Information Packs - An Overview
Most people have heard of Home Information Packs (HIPs) but unless you work in the property market, or have sold a property in the last 6 months, your understanding of the subject has probably been gleaned from a handful of scare stories in the papers.
If you are thinking of buying or selling a property in the coming months you will need to have a basic knowledge of HIPs. To understand the current system, which is still in transition, it is important to appreciate how we got here.
The Story So Far
The first time the public heard about HIPs (then known as Seller’s Packs) was in a manifesto promise made in 1997 by the soon to be Labour Government. Originally presented as the solution to gazumping, the path of HIPs was to be a rocky one. It took six years of consultations, Green Papers, White Papers, pilot schemes and draft legislation before the idea finally made it to Parliament with the introduction of The Housing Bill in 2004.
Having made it through Parliament HIPs were to hit the headlines again in the summer of 2007 when the most controversial element of the pack, the Home Condition Report (HCR), was made voluntary. It became clear that lenders would not accept HCRs and to make matters worse there was a shortfall in the number of Home Inspectors required. Most of those that had been training for the role quit their courses complaining that they had wasted their savings training for a non-existent job.
Finally June 1st 2007 was set as the date for the implementation of the slimmed down pack but there was to be one further twist in the tale. Following a successful application for a Judicial Review by the Royal Institution of Chartered Surveyors the packs were delayed by a further 2 months and would then be phased in, starting with properties containing 4 or more bedrooms. On 14th December 2007 the roll out of HIPs was completed and it became mandatory that a pack should have been applied for before any residential property can be offered for sale.
Perhaps the greatest change that occurred during the 10 years that it took to introduce HIPs was the shift in emphasis from a solution to gazumping to a tool to increase the energy efficiency of the country’s housing stock.
Was it Worth the Wait?
So, after 10 years of twists and turns what are we left with? In simple terms the current pack is made up of a series of legal documents that were previously assembled by the buyer’s solicitor and a new document called an Energy Performance Certificate (EPC).
The legal documents are The Land Registry Title Plan, Office Copy of Register of Title, The Local Search and The Water & Drainage Search. The first two were already available on the internet for download (current cost is £3 each).
Perhaps more interesting is the EPC. This document contains two graphs, one showing how energy efficient the property is and the other the property’s impact on the environment. A useful document on the face of it but unlikely to affect buying decisions. Faced with two identical properties energy efficiency may be a factor but, unless they are newly built, when do you ever find two identical properties?
The most important test of HIPs is whether buyers are interested in them and I can tell you that during the 6 months they have been around not a single buyer has called our office and asked to see one.
The Future
When HCRs were removed from the packs the Government threatened that if voluntary take-up was insufficient they would look again at making them mandatory. Initial evidence suggests that voluntary take-up is virtually zero. The problem now is that most of those training to undertake HCRs dropped out and as a Chartered Surveyor I can tell you that there is little appetite from my profession to undertake what is generally viewed as a dumbed down report.
The next important date in the HIP’s calendar is 1st June this year. That is the date when the temporary provision for first day marketing is due to cease. This is likely to leave sellers frustrated (particularly those in leasehold properties) as they are forced to wait weeks while a HIP is being assembled before anyone can view their property.
It is hoped that this process can be speeded up over time and indeed moves are already underway to facilitate the electronic transfer of conveyancing documents. E-conveyancing has the potential to deliver the faster transactions that were the original aim of HIPs but it is a slow process. Everyone from solicitors to Local Authorities will have to embrace the changes and it is currently estimated that the benefits will not be felt until 2010.
Significant changes are coming but we know by now not to expect anything to happen quickly.
If you are thinking of buying or selling a property in the coming months you will need to have a basic knowledge of HIPs. To understand the current system, which is still in transition, it is important to appreciate how we got here.
The Story So Far
The first time the public heard about HIPs (then known as Seller’s Packs) was in a manifesto promise made in 1997 by the soon to be Labour Government. Originally presented as the solution to gazumping, the path of HIPs was to be a rocky one. It took six years of consultations, Green Papers, White Papers, pilot schemes and draft legislation before the idea finally made it to Parliament with the introduction of The Housing Bill in 2004.
Having made it through Parliament HIPs were to hit the headlines again in the summer of 2007 when the most controversial element of the pack, the Home Condition Report (HCR), was made voluntary. It became clear that lenders would not accept HCRs and to make matters worse there was a shortfall in the number of Home Inspectors required. Most of those that had been training for the role quit their courses complaining that they had wasted their savings training for a non-existent job.
Finally June 1st 2007 was set as the date for the implementation of the slimmed down pack but there was to be one further twist in the tale. Following a successful application for a Judicial Review by the Royal Institution of Chartered Surveyors the packs were delayed by a further 2 months and would then be phased in, starting with properties containing 4 or more bedrooms. On 14th December 2007 the roll out of HIPs was completed and it became mandatory that a pack should have been applied for before any residential property can be offered for sale.
Perhaps the greatest change that occurred during the 10 years that it took to introduce HIPs was the shift in emphasis from a solution to gazumping to a tool to increase the energy efficiency of the country’s housing stock.
Was it Worth the Wait?
So, after 10 years of twists and turns what are we left with? In simple terms the current pack is made up of a series of legal documents that were previously assembled by the buyer’s solicitor and a new document called an Energy Performance Certificate (EPC).
The legal documents are The Land Registry Title Plan, Office Copy of Register of Title, The Local Search and The Water & Drainage Search. The first two were already available on the internet for download (current cost is £3 each).
Perhaps more interesting is the EPC. This document contains two graphs, one showing how energy efficient the property is and the other the property’s impact on the environment. A useful document on the face of it but unlikely to affect buying decisions. Faced with two identical properties energy efficiency may be a factor but, unless they are newly built, when do you ever find two identical properties?
The most important test of HIPs is whether buyers are interested in them and I can tell you that during the 6 months they have been around not a single buyer has called our office and asked to see one.
The Future
When HCRs were removed from the packs the Government threatened that if voluntary take-up was insufficient they would look again at making them mandatory. Initial evidence suggests that voluntary take-up is virtually zero. The problem now is that most of those training to undertake HCRs dropped out and as a Chartered Surveyor I can tell you that there is little appetite from my profession to undertake what is generally viewed as a dumbed down report.
The next important date in the HIP’s calendar is 1st June this year. That is the date when the temporary provision for first day marketing is due to cease. This is likely to leave sellers frustrated (particularly those in leasehold properties) as they are forced to wait weeks while a HIP is being assembled before anyone can view their property.
It is hoped that this process can be speeded up over time and indeed moves are already underway to facilitate the electronic transfer of conveyancing documents. E-conveyancing has the potential to deliver the faster transactions that were the original aim of HIPs but it is a slow process. Everyone from solicitors to Local Authorities will have to embrace the changes and it is currently estimated that the benefits will not be felt until 2010.
Significant changes are coming but we know by now not to expect anything to happen quickly.
Tuesday, 29 January 2008
2008 Market Comment by Prospect PhD Manager Stuart Ross
Home Truths
With the economy now in a period of uncertainty, Stuart Ross of Prospect Premier Homes, looks at the local property market in 2008 and offers some home truths and sound advice for sellers.
Where have all the TV property programme presenters gone? They are certainly not on our screens any longer, except in endless repeats which now seem to portray a rose-tinted world where property prices are in a never-ending upward spiral. Well, most presenters have disappeared from view because they don’t have a view any longer, or certainly not one they want to air to viewers. They can no longer sensationalise about making big money from new home off-plan purchases, buy-to-lets or fix-ups.
The truth is that the property market is cyclical. All these people seem to surface when the going is good but go to ground when times are less so. Where are they now that the market is hardening up? Why aren’t they telling us how to buck the trend? Because, by-and-large, there is no way to buck the trend. The market is how it is. We all live in a market economy and we all have to work within it – for better or worse. It’s just that we’ve had it better for so long. Many younger estate agents haven’t known anything but a buoyant sellers’ market. Some have set up in business on the basis that estate agency isn’t that difficult. Well it is and it’s going to get more difficult.
So without the TV presenters to offer us their views where is one to go for the right advice? Who does one turn to when the going gets tougher? Like most things in life when you need someone to show you the way it is best to find someone who has been that way before and knows the path well. So if you are selling in 2008 here are some important points about this market that experienced estate agents understand only too well.
- Don’t believe everything you read in the press. The media is invariably three months behind the market and the national newspapers cannot reflect local market conditions that can swing wildly from county to county and even town to town. Conditions in Berkshire & Hampshire are better than we had dared hope for. Interest rates are low and will probably go lower still. Employment is high. Money is tighter but buyers without a bad credit history are keen to purchase in many areas if the right property becomes available.
- At the upper end of the market please don’t hold your breath for City whiz kids and overseas buyers with more money than sense. Firstly they have more money because they have sense and invariably they like to buy low and sell high -whatever commodity they are dealing in. Billions were written off city bonuses at the end of last year so there are fewer bonus buyers than we have seen over the past few years. Also it’s not true that Russians are buying everything at the top end of the market, and at full prices, despite what a few national estate agency firms may like to say. A relatively tiny number of houses and flats, mostly in London, are selling to eastern buyers. For the vast majority of sellers within these shores Russian buyers are not the geese that lay the golden eggs – even if one or two are occasionally by Faberge!
- Start planning your 2008 sale early. Don’t wait for spring!
- Be prepared to be flexible on price and timing.
- Remember that property values have risen so much in the past few years even a fairly large negative correction to prices will have little significant effect on those who have owned their property for over three years. The notion of losing out is uncomfortable to anyone, but experienced movers understand they have to take the rough with the smooth.
- What one loses on the swings one gains on the roundabouts. Price corrections work both ways – on the sale and the purchase. 2008 could be one of the best years in almost a decade for finding a great property. But selling will be a challenge. Would it be easier if things were reversed? Not really. One thing is sure: in property one rarely gets it good both ways! Be realistic.
- Use an experienced professional to show you the way. Fee-cutting estate agents with fancy offices can be very attractive to the uninitiated, but don’t be beguiled. You get what you pay for. In this market a wise seller needs sage advice based on experience and know-how. Sellers will need the services of those who offer their clients skill and candour as well as respect - not the scant attentions of those who regard other people’s homes simply as commission-generating units of residence, or as another tick on the office dry-board score sheet. If you are selling and don’t want to be a number make sure you get market appraisals from several reputable estate agents and be certain to ask each one how long they have worked in the area. Also ask if they worked through the last property downturn and, most importantly, what they learnt from it.
- Home Information Packs have now been rolled out to all but a few property types. If your property has been on the market for some months and you are delighted that you weren’t compelled to buy a HIP at the time don’t be too pleased. Before very long the fact that your property doesn’t have a HIP will rather advertise the length of time it has been on the market – not a very good selling point! The best course of action is to obtain a HIP now.
- Finally there is no reason why a property that is well presented, in good order and priced correctly should not find an eager buyer but the right advice is crucial from the start.
To emphasise this Prospect PhD offer a free market appraisal, which guarantees sellers sound and relevant market insight based on real local knowledge, long experience, a track record of excellent results in bad markets as well as good, and advice from those who certainly know their way in these market conditions. Sellers, at the very least, owe themselves that in 2008.
You can contact us seven days a week on 0118 9799 005 to arrange a free valuation and market update on your property or CLICK HERE
Berkshire Estate Agents Covering Wokingham, Crowthorne, Winnersh, Reading, Warfield, Binfield, Bracknell, Ascot & surrounding areas.
How much is your house worth today?
Before inviting you to take advantage of our free valuation service, with such dramatic changes in the housing market during 2007, I felt it significant to write and outline our vision for 2008.
Initially, reviewing 2007, the first half of the year saw high demand through confidence whilst a lack of properties coming onto the market fuelled price increases. The mid to later part to 2007 interest rates continued to rise; the HIP legislation was enforced accompanied by mortgage criteria changing from lenders due to the volatile US markets. This naturally cooled market conditions, increased uncertainty and in reflection slowed house prices.
Positively for the future, 2007 finished with a reduction in the national base rate in December and with the suggestion of further reductions to come in the first half of 2008. The Governor of the Bank of England took the almost unprecedented step in December of announcing that there is a high chance of further reductions coming soon.
So what does 2008 bring? Of course no one can ever be certain, however we can be sure that Home Information Packs are now part of the buying and selling process, and secondly, we believe that there is a commitment from the Bank of England to increase consumer confidence. Also, with the potential changes to Capital Gains Tax the Government has announced for 2008, we expect a boost in the number of investment buyers seeking properties to purchase.
Taking into account the serious changes that occurred during 2007 and what lies ahead for homeowners, we would like to offer you a free market review, which can include:-
Residential sales – A no obligation market appraisal of your home or investment properties, looking at the whole conveyancing process and explain what Home Information Packs are all about, including what they mean to homeowners.
Independent mortgage advice - Review your current mortgage arrangements in this ever changing market. Appointments can be at home, work or in our office at times to suit you including evenings and weekends when the high street banks are shut. This is with Mark Hemmings – our most experienced INDEPENDENT financial Advisor.
Lettings - Market appraisal of your property’s price and estimated yield. We can also advise on any potential investments that may be worth considering.
If any of the above is of interest to you, please give me a call on 0118 9799 005 and I will be happy to help.
Have a great day
Stuart Ross
Prospect PhD Area Manager
Berkshire Estate Agents Covering Wokingham, Crowthorne, Winnersh, Reading, Warfield, Binfield, Bracknell, Ascot & surrounding areas.
Initially, reviewing 2007, the first half of the year saw high demand through confidence whilst a lack of properties coming onto the market fuelled price increases. The mid to later part to 2007 interest rates continued to rise; the HIP legislation was enforced accompanied by mortgage criteria changing from lenders due to the volatile US markets. This naturally cooled market conditions, increased uncertainty and in reflection slowed house prices.
Positively for the future, 2007 finished with a reduction in the national base rate in December and with the suggestion of further reductions to come in the first half of 2008. The Governor of the Bank of England took the almost unprecedented step in December of announcing that there is a high chance of further reductions coming soon.
So what does 2008 bring? Of course no one can ever be certain, however we can be sure that Home Information Packs are now part of the buying and selling process, and secondly, we believe that there is a commitment from the Bank of England to increase consumer confidence. Also, with the potential changes to Capital Gains Tax the Government has announced for 2008, we expect a boost in the number of investment buyers seeking properties to purchase.
Taking into account the serious changes that occurred during 2007 and what lies ahead for homeowners, we would like to offer you a free market review, which can include:-
Residential sales – A no obligation market appraisal of your home or investment properties, looking at the whole conveyancing process and explain what Home Information Packs are all about, including what they mean to homeowners.
Independent mortgage advice - Review your current mortgage arrangements in this ever changing market. Appointments can be at home, work or in our office at times to suit you including evenings and weekends when the high street banks are shut. This is with Mark Hemmings – our most experienced INDEPENDENT financial Advisor.
Lettings - Market appraisal of your property’s price and estimated yield. We can also advise on any potential investments that may be worth considering.
If any of the above is of interest to you, please give me a call on 0118 9799 005 and I will be happy to help.
Have a great day
Stuart Ross
Prospect PhD Area Manager
Berkshire Estate Agents Covering Wokingham, Crowthorne, Winnersh, Reading, Warfield, Binfield, Bracknell, Ascot & surrounding areas.
Thursday, 3 January 2008
2008 Market Predictions
Well it’s New Year again, so it is time we look ahead and try to predict what will happen in the property market over the coming year!
Below are my personal predictions!
- There will be two, possibly three, further quarter point cuts in the base rate during the first half of 2008. They will then stay at around 4.5% for the remainder of the year.
- Prices will continue to soften during the first half of the year at which point bargain hunters, spurred on by lower interest rates, will help to stabilise the summer market. Prices will then remain flat for the rest of the year. Total price falls should be restricted to about 5% on average in Berkshire with the smaller properties, in particular flats taking the brunt.
- Banks will continue to tighten their lending criteria in reaction to the credit crunch making it even harder for first time buyers to enter the market. This will also lead to a significant slowdown in the buy-to-let market.
- Rents will increase significantly as a result of the additional demand (from those that can’t get a mortgage) and reduced supply.
- The introduction of Energy Performance Certificates for rental properties in October will take most buy-to-let Landlords by surprise (just like the Tenancy Deposit Scheme did) leading to a last minute panic to avoid penalties. We’ll do our best to remind you regularly!
- Here at PhD we will continue to provide our clients with an unrivalled service & achieve many sales!!!
A happy and prosperous New Year from all at Prospect PhD!
Berkshire Estate Agents Covering Wokingham, Crowthorne, Winnersh, Reading, Warfield, Binfield, Bracknell, Ascot & surrounding areas.
Saturday, 29 December 2007
Selling Tips For Winter
Selling a property during the cold winter months involves a lot of hard work but while buyers may be scarcer it is comforting to know that those who are out viewing tend to be the more serious ones. If you feel like putting that extra bit of effort in to achieve an early sale take a look through our winter selling tips below.
- Make sure that your property is warm whenever viewers are expected. Buyers who come in and aren't comfortable won't stay long so turn the thermostat up a couple of degrees to warm up your potential buyers. If your agent has keys ask them to let you know when people will be viewing and make use of your heating timer to warm the place up in advance.
- Keep a large mat inside the front door for cleaning muddy shoes. Not everyone is comfortable about taking their shoes off in a strange property so a good alternative is to provide disposable shoe covers. Also, keep a container by the door for storing wet umbrellas.
- If the weather turns very cold think about gritting the front path and the footpath to the front of your property. Always clear snow away from the front of the property before your viewers arrive.
- Maximise whatever light is available. Make sure the windows are sparkling, blinds fully opened and curtains drawn back. If the day is overcast keep all the lights on during viewings. Use the highest wattage bulb that your fittings can safely handle. If your agent is accompanying the viewings ask them to do the same as many agents will send an inexperienced junior out on viewings.
- Even the most attractive gardens can look dreary in the middle of winter. If you have photos of your garden in full bloom put them on display and point them out to viewers.
If there are any winter positives to your property such as closeness to shops, transport or indoor play areas for the children don’t forget to tell viewers. - It may be impossible to redecorate the front of your property at this time of year but a good clean can make all the difference. Don’t forget to clear up the last of the fallen leaves and leave the porch light on to welcome viewers.
If you would like more advice on seling your Berkshire or Hampshire home please feel free to conatct me on 0118 9799005 or vist http://www.prospectphd.co.uk/
To book a FREE valuation CLICK HERE!
Berkshire Estate Agents Covering Wokingham, Crowthorne, Winnersh, Reading, Warfield, Binfield, Bracknell, Ascot & surrounding areas.
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